2012 to be biggest internet IPO year since 99 dotcoms

Facebook and Yelp are set to lead the biggest year for the US initial public offerings by internet companies since 1999, testing demand for IPOs after investors lost money on Zynga and Pandora Media.

With Facebook considering the largest internet IPO on record and regulatory filings showing that at least 14 other Web-related companies are planning sales, the industry may raise $11 billion next year, according to data compiled by Bloomberg. That would be the most since $18.5 billion of IPOs in 1999, just before the dotcom bubble burst.

While surging sales growth may lure investors to Facebook, the biggest social-networking site, heightened stock volatility and Europes sovereign-debt crisis could temper the pace of global IPOs after a 38% decline in 2011. Even internet companies may cut valuations for their offerings after Zynga, the largest developer of games for Facebook, and online-radio company Pandora slumped following share sales this year, according to researcher Morningstar.

IPOs raised $155.8 billion in 2011, compared with $252 billion a year earlier, and U.S. initial offerings generated $38.8 billion, about 10 percent less than in 2010, Bloomberg data show. In Asia , IPOs this year have raised $79.2 billion, less than half the $176.5 billion last year, Bloomberg data show.

While funds raised in Europe rose for the year, they sank more than 95 percent since August from a year earlier after the worsening debt crisis and a cut to the U.S. credit rating sapped confidence in global markets.